Case BriefsSupreme Court

Supreme Court: Explaining the scope of Section 92 Proviso (6) of the Evidence Act, 1872, the 3-judge bench of NV Ramana, CJ* and Surya Kant and Aniruddha Bose, JJ has held that the said proviso can be resorted to only in cases where the terms of the document leave the question in doubt.

“But when a document is a straightforward one and presents no difficulty in construing it, the proviso does not apply. In this regard, we may state that Section 95 only builds on the proviso 6 of Section 92.”

The Court was of the opinion that if the contrary view is adopted as correct it would render Section 92 of the Evidence Act, otiose and also enlarge the ambit of proviso 6 beyond the main Section itself.

Background

Initially Appellant’s husband was running a business of stationary in the name of “Karandikar Brothers” before his untimely demise in the year 1962. After his demise, she continued the business for some time but later decided to let the Respondent run the same for some time.

The terms of the agreement were:

“The stationary shop by name “Karandikar Brothers” belonging to you of the stationary materials which is situated in the premises described in Para 1 (a) above and in which the furniture etc. as described in Para l(b) above belonging to you is existing is being taken by me for conducting by an agreement for a period of two  years beginning from 1st February 1963 to 31st January 1965.

The rent of the shop described in Para 1 (a) above is to be given by you only to the owner and I am not responsible therefor. I am to pay a royalty amount of Rs. 90 /-(Rupees Ninety only) for taking the said shop for conducting, for every month which is to be paid before the 5th day of every month.”

Time after time, the contract was duly extended. In 1980s, desiring to start her husband’s business again, appellant herein issued a notice requesting the Respondent to vacate the suit premises, However, the Respondent replied to the notice claiming that the sale of business was incidental rather the contract was a rent agreement stricto sensu.

The Trial Court while negating the contention of the Respondent, that the shop premises was given to him on license basis.

The Bombay High Court, however, held that:

“Thus, considering the entirety of the case, in my view, both   the   Courts   below   have   incorrectly   interpreted   the document and the surrounding circumstances which, in my view, indicate that the parties had in fact agreed that the premises were transferred to the appellant on a leave and license basis.”

Analysis

Section 95. Evidence as to document unmeaning in reference to existing facts.—

When language used in a document is plain in itself, but is unmeaning in reference to existing facts, evidence may be given to show that it was used in a peculiar sense.  Illustration A sells to B, by deed, “my house in Calcutta”. A had no house in Calcutta, but it appears that he had a house at Howrah, of which B had been in possession since the execution of the deed. These facts may be proved to show that the deed related to the house of Howrah.

Section 92. Exclusion of evidence of oral agreement.—

When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:…

Proviso (6).—Any fact may be proved which shows in what manner the language of a document is related to existing facts.

The Court explained that Section 92 specifically prohibits evidence of any oral agreement or statement which would contradict, vary, add to or subtract from its terms. If oral evidence could be received to show that the terms of the document were really different from those expressed therein, it would amount to according permission to give evidence to contradict or vary those terms and as such it comes within the inhibitions of Section 92. It could not be postulated that the legislature intended to nullify the object of Section 92 by enacting exceptions to that section.

Considering the facts and materials placed before it, the Court was of the opinion that the contract mandated continuation of the business in the name of ‘Karandikar Brothers’ by paying royalties of Rs. 90 per month.

“Once the parties have accepted the recitals and the contract, the respondent could not have adduced contrary extrinsic parole evidence, unless he portrayed ambiguity in the language. It may not be out of context to note that the extension of the contract was on same conditions.”

The Court, hence, held that the High Court erred in appreciating the ambit of Section 95, which led to consideration of evidence which only indicates breach rather than ambiguity in the language of contract. The evidence also points that the license was created for continuation of existing   business, rather than license/lease of shop premises.

The Court was, hence, of the opinion that if the meaning provided by the High Court is accepted, then it would amount to Courts substituting the bargain by the parties.

“Such interpretation, provided by the High Court violates basic tenants of legal interpretation.”

[Mangala Waman Karandikar v. Prakash Damodar Ranade, 2021 SCC OnLine SC 371 , decided on 07.05.2021]


*Judgment by: CJI NV Ramana

Know Thy Judge| Justice N.V. Ramana

Legislation UpdatesStatutes/Bills/Ordinances

Governor of Uttar Pradesh promulgates the Uttar Pradesh Regulation of Urban Premises Tenancy Ordinance, 2021

Purpose of the Ordinance: To establish Rent Authority and Rent Tribunals to regulate renting of premises and to protect the interests of landlords and tenants and to provide speedy adjudication mechanism for resolution of disputes and matter connected therewith or incidental thereto.

[Section 3] Ordinance not to apply to certain premises:

  • Premises owned by the Central or State Government or Union Territory Administration or a Government undertaking or Enterprises or Statutory Body or Cantonment Board.
  • Premises owned by a Company, University or Organisation given on rent to its employees as part of service contract
  • Premises owned by religious or charitable institution as may be specified, by State Government’s notification.
  • Premise owned by Auqaf registered under the Waqf Act, 1995 or by any public trust registered under applicable law.
  • Other building or category of buildings specifically exempted in public interest by notification by the State Government.

 [Section 4] Tenancy Agreement

 No person shall, after the commencement of this Ordinance, let or take on rent any premises except by an agreement in writing, which shall be informed to the Rent Authority by the landlord and tenant jointly.

In case the tenant and landlord fail to jointly inform the execution of the tenancy agreement, the both of them shall separately inform the execution of tenancy agreement to the Rent Authority within a period of 1 month from the date of expiry.

[Section 5] Period of Tenancy

 Every tenancy entered into after the commencement of this Ordinance shall be valid for a period as agreed upon between the landlord and the tenant.

Tenant may request the landlord for renewal or extension of the tenancy, within the period agreed to in tenancy agreement, and if agreeable to the landlord, may enter into a new tenancy agreement with the landlord or mutually agreed terms and conditions.

 If a tenancy for a fixed term ends and has not been renewed or the tenant fails to vacate the premises at the end of such tenancy, then such tenant shall be liable to pay an enhanced rent to the landlord.

[Section 6] Rights and Obligations of successor in case of death

 Terms of agreement shall be binding upon their successors in the event of the death of the landlord or tenant, the successor of the deceased landlord or tenant shall have the same rights and obligations as agreed to in the tenancy agreement for the remaining period of such tenancy.

In the event of the death of tenant, the right of tenancy shall devolve on his successors, namely:

Spouse, son or daughter or where there are both son and daughter, both of them; parents; daughter-in-law, being the widow of his pre-deceased son; widowed or divorced sister

[Section 7] Restriction on sub-letting

 No tenant shall, except by entering into a supplementary agreement to the existing tenancy agreement:

  • Sub-let whole or part of the premises held by him as a tenant
  • Transfer or assign his rights in the tenancy agreement or any part thereof

[Section 10] Rent Authority to determine the revised rent in case of dispute

 In determining the rent to be revised, the rent authority may be guided by the prevailing market rent in the surrounding areas let out on rent.

[Section 11] Security Deposit

 Security deposit to be paid by the tenant in advance shall be such as may be agreed upon between the landlord and the tenant in the tenancy agreement, which shall be:

  • Not exceed two months’ rent, in case of residential premises; and
  • Not exceed 6 months’ rent, in case of non-residential premises.

Security Deposit shall be refunded to the tenant on the date of taking over vacant possession of the premises from the tenant, after making due deduction of any liability of the tenant.

[Section 14] Deposit of rent with Rent Authority

 Where the landlord refuses to accept any rent and other charges payable or refuses to give a receipt, the rent and other charges shall be paid to the landlord by postal money order or any other method, in such manner as may be prescribed, consecutively for two months, and if the landlord refuses to accept the rent and other charges within such period, then the tenant may deposit the same with the Rent Authority.

In case the tenant is unable to decide as to whom the rent is payable during the period of tenancy agreement, the tenant may, in such case, deposit the rent with the rent authority.

[Section 15] Repair and Maintenance of Property

 In case tenant fails or refuses to carry out the repairs, the landlord may carry out the repairs and deduct the amount incurred for such repairs from the security deposit and the amount so deducted shall be paid by the tenant within a period of one month of the issue of notice by the landlord.


To read more, click on the link below: Tenancy Ordinance